The Case For SHV: A Safe Haven Amid Market Euphoria
Current US stock market valuations are at historic highs, with the S&P500 trading at a CAPE ratio above 38 — levels not seen since the dot-com bubble. Forward returns for equities may be limited, with expected long-term returns in the low-to-mud single digits, and risk of a "lost decade". iShares Short Treasury Bond ETF (SHV) offers low volatility and a current yield of over 4%, making it an appealing parking spot for capital.
SHV: Short - Term Liquidity Exposition
iShares Short Treasury Bond ETF offers a low-risk, short-duration alternative to money market funds by investing in US Treasury bills with maturities of 0–12 months. The fund efficiently tracks its benchmark index and benefits from roll-down yield, but current macro indicators do not favor entry. Recent auction dynamics and yield curve analysis suggest limited upside for SHV, with better opportunities in riskier assets like gold and Bitcoin.
SHV: A Decent 'Cash Parking' ETF
The iShares Short Treasury Bond ETF offers a 4.06% yield with minimal volatility, making it a solid option for parking cash during market uncertainty. Short-term bonds remain relevant in 'no recession' and stagflation scenarios, functioning as versatile tools for portfolio risk management. The current trade war and economic uncertainty suggest investors may benefit from keeping cash in ETFs like the SHV for a few months until more economic data becomes available.
SHV: High Yield In An Uncertain Environment
iShares Short Treasury Bond ETF presents a good option for investors looking to park their cash during a period of high interest rates. The long-term value of this ETF which holds short-term Treasury securities is discussed. I will also explain why I think that the current trajectory of interest rates doesn't necessarily reflect a short-term opportunity risk for SHV.
SHV: 18 Months Later, Still A Strong Buy
SHV still offers a return in the mid-4% range, making it a core part of my conservative, all-ETF portfolio for nearly 2 years. T-bills, particularly SHV, provide a stable income source and buffer against market volatility, outperforming long-term bond ETFs like TLT in recent years. My 2-ETF model, emphasizing T-bills, has consistently outperformed traditional stock-bond mixes, avoiding significant drawdowns while offering a "free look" at market developments.
My Replacement For Cash: SHV
The iShares Short Treasury Bond ETF (SHV) is a low-volatility ETF holding short-term Treasuries, ideal for parking idle cash with a low expense ratio of 0.15%. SHV offers interest income on Treasuries, closely tracking short-term interest rates, making it a better alternative to traditional savings accounts. I use SHV to earn interest on idle cash, keeping my checking accounts low to avoid losing potential interest income. That's pretty much the whole purpose of these ETFs.
SHV: 2 Ways To Beat The Cash Parking 5.1% Yield
iShares Short Treasury Bond ETF holds treasury securities maturing in a year or less, tracking the ICE Short US Treasury Securities Index. With a 5.07% yield and minimal duration and credit risk, SHV is a suitable option for cash parking. We go over two ways that you can do better, but that will depend on what exactly you are parking that cash for.
